VALUE ENGINEERING

PROGRAM

~ November 2009 ~

CONNECTICUT DEPARTMENT OF TRANSPORTATION

BUREAU OF ENGINEERING AND CONSTRUCTION
Office of Quality Assurance
 Value Engineering Program
November 2009

TABLE OF CONTENTS

Introduction 3

Value Engineering Program Overview 4

Project Selection 4

VE Study Levels 5

Timing 5

Study Team 6

Study Procedures – VE Job Plan 7

VE During Construction 8

Program Monitoring and Reporting 9

Appendix A: VE Study Requirements Checklist 10

Appendix B: Sample Letter to FHWA 11

Appendix C: FHWA Annual Report Form 12

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Introduction
Value Engineering (VE) is a systematic process using a team from a variety of disciplines
to improve the value of a project through the analysis of its functions. The VE process
incorporates, to the extent possible, the values of design, construction, maintenance, contractors,
state, local and federal approval agencies, other stakeholders, and the public.

In accordance with 23 CFR Part 627, State highway agencies must establish programs to
assure that VE studies are performed on all Federal-aid highway projects on the NHS (National
Highway System) with an estimated cost of $25 million or more and for bridge projects with an
estimated cost of $20 million or more. The Office of Quality Assurance, in cooperation with the
design team, should identify and implement VE studies on additional projects with
characteristics or factors that may offer improved value. Factors may include more than one
alternative, complexity, fast track scheduling, controversial components, innovation, traffic
impacts or scope creep.

Projects meeting the underlined criteria above must have a documented VE study
performed in a timely manner. Failure to conduct a VE study as stipulated by federal
requirements may result in delays in authorization of construction funds for those federal-aid
projects meeting the criteria that have not had a Value Engineering study performed.

Previously, VE studies were conducted through the Department’s Consultant Design

Division as an adjunct to the selected project’s scope of services. The oversight of the Value
Engineering program is now administered by the Office of Quality Assurance (OQA).

This document will serve as a guideline to maintain the Value Engineering Program
within the Connecticut Department of Transportation. As such, the document itself will be
subject to revision and maintenance as needed. Any modifications/updates to this document
should be coordinated with the Federal Highway Administration (FHWA).

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Value Engineering Program Overview

The Connecticut Department of Transportation will administer a Value Engineering
Program wherein certain projects in design will be systematically reviewed for potential cost
savings. A Value Engineering team will typically meet for a one week period and present their
recommendations to the Department’s designer(s) for evaluation and, if acceptable,
implementation.

The VE study will have the following objectives:

• Increase value
• Maintain function and scope
• Minimize life cycle costs
• Encourage innovation
• Highlight potential cost reduction on transportation improvement projects
• Produce a higher quality, more efficient transportation project

Project Selection
The trigger for Value Engineering studies to be warranted is first evident at Project
Scoping when the Department’s design team estimates that the preliminary total project costs,
including Environmental studies, Preliminary Engineering, Final Design, ROW and Construction
costs of the project, will exceed the identified cost criteria (see below). At any time during the
project development that the Engineer’s Estimate indicates the total project costs will exceed the
identified cost criteria, the Design Project Manager is to notify OQA that a VE study must be
implemented.

The current cost criteria for a VE study are as follows:

Federal-aid highway projects on the NHS $25 Million or more estimated project cost
Federal-aid bridge projects $20 Million or more estimated project cost

Other projects may also be selected for VE studies. In addition to the cost, other issues
adding to the complexity of the project design should be considered in the selection process.
These complexities may include: critical constraints, difficult technical issues, expensive
solutions, external influences, or complicated functional requirements. The types of projects that
usually provide the highest potential for value improvements are:

• Projects with alternate solutions which vary the scope and cost
• New alignment or by-pass sections
• Widening existing highways for capacity improvements
• Major structures
• Interchanges on multi-lane facilities
• Projects with extensive or expensive environmental or geotechnical requirements
• Difficult materials requirements or inferior material sources
• Major reconstruction of existing highways
• Projects with major traffic control
• Projects with multiple stages

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OQA personnel will track all potential projects due for VE studies. The initial indicator
tool is the Department’s “Working Schedule of Federal-Aid Obligations” compiled by the Office
of Capital Services. OQA compiles and updates a list of projects due for Value Engineering
studies, adding or removing projects as project estimates go through refinements. OQA shall
ensure that a listing of all federally funded projects planned for VE studies is forwarded to
FHWA on a semi-annual basis. The Department’s designers will play a major role in identifying
candidate projects for VE studies.

Whenever a VE study is required, the project’s budget and schedule should be adjusted to reflect
the additional resources necessary to complete the study.

VE Study Levels
The Department has established two (2) levels of Value Engineering studies: Level A,
and Level B. The level chosen will dictate the composition of the study team and the scope of
the procedures to be followed.

The Level A study is the most comprehensive and should be considered for complex
projects, new construction, capacity improvements, and major reconstruction. This level will
typically involve task-based consultant engineers with particular expertise relating to the type of
project under study.

The Level B study should be considered for “maintenance” type work (paving, guiderail,
drainage improvements) and replaced-in-kind work where no additional capacity is gained.
Level B studies may be completed by task-based consultant or in-house staff.

Once a project is selected for study, OQA and the design team will determine the level of
study and composition of study team. Later sections of this document contain more specific
information about the personnel and procedures to be utilized in Level A versus Level B studies.

Timing
The timing of when to conduct the VE study is important. The Department has
completed studies at various times in the project schedule. Many projects have gone all the way
to final design before a VE study is done. When a study is done at that late of a stage, it is costly
and difficult to implement any recommendations from the VE study. It is recommended that the
VE study be completed as early in the design process as possible. VE is more effective and
influential on performance, quality, and cost of a project when done relatively early in the project
schedule.

When 30% plans of projects due for VE studies are available, OQA will begin to
assemble a study team. OQA will be responsible for scheduling the location(s) and necessary
personnel, both Department and Consultant, to conduct the VE study.

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Study Team
The Value Engineering study team, either Level A or Level B, must be totally
independent of the design team and will typically consist of a Team Leader and five to seven
other members with expertise in various specialties related to the project. OQA will coordinate
with the project designer to determine the engineering disciplines that should be represented on
the VE study team. When necessary or appropriate the OQA may also utilize a consultant
engineering firm specifically contracted by the Department for VE services to assemble the team.
For each VE effort initiated, OQA shall ensure FHWA is offered the opportunity to attend and
participate. (FHWA Major Projects Team Leader 860-659-6703 ext. 3008)

To ensure a productive and focused VE effort, the Team Leader should be a Certified
Value Specialist (CVS), certified by SAVE International, or a Professional Engineer registered in
the State of Connecticut, with a minimum of ten years of experience related to roadway or bridge
design, roadway or bridge construction, maintenance or a specific engineering discipline
required by the project. For a Level A study the Team Leader should be a CVS who has
experience with VE studies. Level B studies can be led by either a CVS or a CT registered
Professional Engineer.

The other team members shall have diverse areas of expertise with concentration on the
major challenges/problem areas anticipated within the project (traffic, structures, soils, paving,
etc.) and general knowledge in design, construction, rights-of-way, maintenance and/or traffic
operations. Level A team members will typically be staff from a consultant engineer firm
specifically contracted by the Department to conduct VE services. Level B team members may
be in-house or VE consultant engineers or a combination of the two.

The project designers (Department and/or consultant), will also participate in the VE as
required to provide plans, special provisions and estimates, as well as to present the project
overview and conduct project site field reviews. The project designers will be expected to attend
the VE sessions to answer design specific questions and to hear the oral presentation on the last
study day so they can begin to review the recommendations made.

The Office of Quality Assurance will coordinate the activities of the VE study team,
including providing manuals and reference materials, providing access to a conference room
with any needed electronic equipment, arranging for site visits and any other materials that may
be considered necessary. Level B studies will most likely occur within the DOT Newington
Headquarters building. Some Level A studies may be held at a consulting engineer’s office
within the state.

A Value Engineering Study Requirements Checklist is included in Appendix A.

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Study Procedures – VE Job Plan

The VE study by either the Level A or Level B VE study team should be conducted using
a VE Job Plan which includes the following generally recognized steps:

o Design Presentation/Site Visit - Look at the overall project, its location and
existing conditions. Begin to understand the design philosophy used.

o Investigation Phase - Investigate the background information, technical input,

reports (such as traffic, soils, hydraulic, environmental, accidents) and field data,
function analysis, team focus, and objectives.

o Speculation Phase - Be creative and brainstorm alternative proposals and

solutions.

o Evaluation Phase - Analyze alternatives, technical evaluation, life cycle costs,

documentation of logic, and rationale.

o Development Phase - Develop technical and economic supporting data to prove

the feasibility of the desirable concepts or ideas. Develop team recommendations.
Recommend long-term as well as interim solutions as applicable.

o VE Presentation Phase - Present the findings and recommendations of the VE

team in an oral presentation at the conclusion of the study. The findings and
recommendations shall also be described in a written report following the
completion of the VE study. In many cases, the way the findings are presented
can be as important as the findings themselves.

o Implementation Phase - The recommendations formulated by the VE study team

are given a fair and thorough evaluation by the appropriate managers of the
Department. Prepare an implementation plan including the response from the
managers and a schedule for accomplishing the recommendations.

o Audit Phase - Establish a record system to track the results and accomplishments
of the VE program and to compile the appropriate statistical analysis as requested
by management personnel.

The Investigation through VE Presentation phases will usually be scheduled by

OQA and typically lasts one week for both Level A and Level B studies. Some Level B studies
will be conducted in less than one week. The VE study team shall prepare a draft written report
to be delivered within two weeks following the VE Presentation phase so the reviewers can
evaluate the recommendations. The draft written report is typically rough, sometimes including
handwritten notes, etc. and is distributed to the reviewers only, so they can begin the review of
recommendations in a timely manner and not have to wait for the final report. The final report
will be forwarded to all interested parties and filed with the project records. The final VE report

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is more “polished” and is independent of the results of the review of recommendations. It does
not contain information about which recommendations were incorporated into the project or
rejected.

The reviewers will include, but not be limited to, the project’s designers, DOT personnel
from Consultant Design, Hydraulics and Drainage, Soils and Foundations, Environmental
Planning, Traffic, Construction, Maintenance and FHWA. The recommendations will go
through an objective review and the length of time for the review may vary depending on project
complexity, but should be limited to one month. There may be some discussion between the
reviewers and the VE team to resolve any issues that arise regarding the recommendations. The
various reviewers will submit their comments to Design to recommend implementation or
rejection of the individual VE study recommendations, similar to a plan review process.

Ultimately the Project Manager in Design, in consultation with the various Department
Units/Sections involved with the project, will determine which VE recommendations will be
developed into the project, as well as documenting the rationale for not progressing the other VE
recommendations.

The Implementation Phase concludes when Design notifies the FHWA by letter (See
Appendix B for sample letter) outlining all the VE recommendations, and detailing the approved
VE recommendations which will be incorporated into the design of the project, and the estimated
cost savings from the approved recommendations. The recommendations which have been
rejected must be also be justified in the letter. The Department shall document the date of the
letter and reference the VE study completion when transmitting the PS&E document for
approval.

The Office of Quality Assurance will initiate the Audit Phase once the final approved and
rejected recommendations are developed by tracking pertinent VE information on the project.
As the project plans and specifications progress through 60%, 90% and final design, the
Engineer’s Estimate will be logged in a database. When the project is advertised, subsequent
bids are opened, and throughout the construction, OQA will continue to track the costs. Of
course, there will be no absolute way to compare the costs of the implemented VE recommended
design to the initial design.

VE During Construction
The Department has a Value Engineering provision within Division I of its Standard
Specifications for Roads, Bridges and Incidental Construction (Form 816) wherein a Contractor
may propose changes to a project of any size for potential cost savings. Article 1.09.02 outlines
the steps necessary for a Value Engineering Change Proposal (VECP) to be approved by the
Department. Generally, the process is carried out by the Office of Construction with input from
the project Designer(s). The Office of Quality Assurance maintains a database where VECP’s
are tracked for future reference, Lessons Learned information and for inclusion in the yearly
report to the FHWA.

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Program Monitoring and Reporting

OQA prepares the annual report to FHWA outlining the numbers of projects that have
undergone Value Engineering studies and Value Engineering Change Proposals. A copy of the
most recent FHWA reporting form can be found in Appendix C. The Office of Quality
Assurance shall be responsible for all VE data management, including the annual FHWA
reporting form.

Additionally, tracking the VE recommendations, VE recommendations implemented,

cost savings projected and cost savings realized will assist in identifying trends, lead to more
effective designs and influence other VE efforts. OQA will regularly review the results of past
VE studies and implement strategies, as warranted, to disseminate this information back to the
Design teams and other Department personnel as appropriate.

Beyond the necessary reporting, the information obtained from the various VE studies
helps all involved to think about alternative ways to look at problem solving and design methods.

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Appendix A: VE Study Requirements Checklist

Project-Related Input* (Study Package)
• Design File
• Quantities
• Estimates
• Right of Way Plans
• Geotechnical Reports
• Plan Sheets
• Environmental Documents
• Cross Sections and Profiles
• Land Use Maps
• Contour Maps
• Quadrant Maps
• Accident Data
• Traffic Data
• Large-Scale Aerial Photographs
• Vicinity Map
• Hydraulic Report
• Aerial Photos
• Existing As-Built Plans

Study-Related Facilities and Equipment

• Room with a large table and adequate space for the team
• Telephone
• Network computer access (if available)
• Vehicle or vehicles with adequate seating to transport the VE team for a site visit**
• Easel(s) and easel paper pads
• Marking pens
• Computer projector
• Masking and clear tape
• Design Manual
• AASHTO Design Book
• Standard Plan Sheets
• Standard Specifications
• MP Log
• Bridge List
• Scales, straight edges and curves
• Field Tables
• Calculators
• Power strip(s) and extension cords

* Not all information listed may be available to the team, depending on the stage of the project.
** If a site visit is not possible, provide video of the project.

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Appendix B: Sample Letter to FHWA

Date__________________

Division Administrator
Federal Highway Administration
628-2 Hebron Avenue, Suite 303
Glastonbury, Connecticut 06033

Dear :

Subject: Value Engineering Study

State Project No. ______
FAP No. ____________
Description___________
Town(s) _____________

Enclosed is a copy of the Value Engineering (VE) Report, together with a copy of the
responses to the VE proposals, for the subject project. These documents are the culmination of
the VE workshop conducted ___________ through ________________.

Three (3) recommendations were generated by the VE Team and further developed into
proposals. The advantages, disadvantages, and cost savings of each proposal were evaluated, as
follows.
VE Proposal Estimated Comments
VE Proposal
Number Savings

Of the three (3) proposals, the following one (1) proposal will be incorporated into the final
contract documents:

• _______________________________

The potential cost savings of implementing this proposal is estimated to be $ .

If you have any questions concerning this material, please contact __________________
at 860-594-____.

Very truly yours,

Signature
Title
Office of Quality Assurance
Enclosures

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Appendix C: FHWA Annual Report Form

Part 1 –Value Engineering Program

Number Question Background and Instructions

1a Does your DOT have a formal VE Answer “Yes” if your DOT has a documented plan or
Program? Yes/No policy statement that identifies the elements and
components of a VE program.

1b Briefly describe your DOT’s If your DOT has processes for delivering the VE Program
documented VE policies or and conducting VE studies documented in a Project
procedures. Development or Design manual or other location, briefly
summarize the following:
Brief Narrative
• Processes used to develop the multi-year VE
program;
• Processes used to ensure VE studies are conducted
on all required projects, including those projects
administered by local agencies;
• Processes for reviewing, accepting or rejecting VE
recommendations;
• Processes for tracking and monitoring VE studies
and the implementation of recommendations.
1c If available, provide the current Provide links to any Web sites currently available that
links to your DOT’s VE-related contain your DOT’s:
Web sites
• General VE Program information
• VE Policies and Guidance
• VE Processes and Procedures
2a Does your DOT monitor the Answer “Yes” if your DOT monitors its performance at a
performance of the VE Program? programmatic level.
Yes/No

2b Does your DOT evaluate and Answer “Yes” if your DOT prepares an annual report that
report on the performance of the evaluates the performance of the VE Program.
VE Program? Yes/No

2c Does your DOT utilize Answer “Yes” if your DOT tracks performance measures
performance measures to assess other than those already required by this survey.
the effectiveness of the VE
Program? Yes/No

2d If the answer to 2b is “Yes”, please If the answer to Question 2a was “Yes”, indicate the
briefly describe. additional performance measures that are utilized.

2e Does your DOT monitor and

oversee VE studies conducted by
local authorities? Yes/No

2f If the answer to 2e is “Yes”, briefly

describe.

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3a Describe any successful practices Briefly describe individual practices or policies that enable
your DOT uses in the delivery of VE studies to be conducted in a successful manner.
the VE Program.

Brief Narrative

3b Describe any successful practices Briefly describe individual practices or policies that enable
your DOT uses to encourage more VE Change Proposals to be implemented in a successful
successful implementation of manner.
VECPs during construction.

Brief Narrative

4a Identify the typical project factors
and associated measures that your
DOT requires to be analyzed on
VE Studies.
Examples:
Identify and briefly describe how project functions (e.g.,
traffic, safety) are typically addressed during the
Investigation, Speculation, and Evaluation phases of your
VE analyses; explain the typical level of effort expended in
analyzing these critical project functions.

Factor Measure

Safety Crashes
Traffic flow Delay
Cost $$$

Brief Narrative

4b Does your DOT incorporate a Life-

Cycle Cost Analysis during the VE
study?

Yes/No

4c If the answer to 4b is “Yes”, please Summarize your DOTs use of life cycle cost analyses while
explain. conducting VE studies; indicate whether they are conducted
as part of the study directly, if the study incorporates an
Brief Narrative independently conducted life cycle cost analysis, etc.

4d Describe when VE studies are Identify the most common point in the project development
generally conducted by your DOT process (planning, 0-30%; 30-70%; 70% or later) when VE
for design-bid-build projects. studies typically occur at your DOT.
Brief Narrative

4e Describe how and when VE studies
are generally conducted by your
DOT for design-build projects.
Brief Narrative
Identify the point in the project development process (e.g.,
planning, prior to issuance of RFP, after issuance of RFP)
when VE studies typically occur. Briefly detail the
approach taken to conducting the study based on the stage
of the project when the study was conducted.

Answer "N/A" if your DOT does not currently utilize

design-build to deliver projects.

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4f If your DOT conducts multiple VE
studies on Major Projects, describe
the points in the project
development process where the
studies occur. Brief Narrative
5 Briefly describe a successful study
completed by your DOT in FY
2008. Brief Narrative
6 Briefly describe any special studies
conducted by your DOT in FY
2008.
Brief Narrative
7 Describe a unique or innovative
VE recommendation or VE
Change Proposal that provided
significant benefit to the project on
which it was implemented
Brief Narrative
8a Enter the number of State DOT,
FHWA, and other individuals
receiving VE training in FY 2008
# DOT
# FHWA
#Other
8b Describe your State DOT’s general
approach to conducting VE
training.
Brief Narrative
Value Engineering Program
November 2009
Identify the common points in the project development
process when VE studies typically occur for Major Projects
($500 million or greater). If your DOT has no current
projects meeting this definition, or if one study is
completed, answer “N/A”.
Briefly describe a successful 2008 VE study as a "best
practice", or describe a general "lesson learned" from
conducting a particular VE study
Describe any business process, review of standards &
specifications, or any other unique studies that used the VE
job plan for which cost savings were not calculated.
Answer “N/A” as appropriate.
Describe an implemented recommendation or VE Change
Proposal that could potentially find application in other
projects or by other DOTs.
Indicate the most common approach taken to conduct VE
training (e.g., VE Module 1 courses, shorter-duration
workshops, etc.) and indicate whether your DOT has
implemented any innovative training techniques.
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Part 2 --Summary of VE Studies
Number Question
9a Total # of Studies Completed in FY
____
# In-House, # Consultant
9b # of Studies Completed in
FY ____ that were Required by
Federal Law
# In-House, # Consultant
9c Anticipated # of Studies to be
Completed during the next two
fiscal years
FY ____ # In-House, # Consultant
FY ____ # In-house, # Consultant
10a Report on the costs associated with
conducting the VE studies
10b Estimated costs of the projects
studied $
Value Engineering Program
November2009
Background and Instructions
Report only on studies that for which all activities were
completed; distinguish between studies accomplished by in-
house resources and consultants
Of the numbers reported in Question 9a, indicate the
number of studies that were conducted to meet current
Federal Regulations (Projects on the Federal-Aid System
with a total estimated cost of $25 Million or more; bridge
projects with a total estimated cost of $20 Million or more).
For informational purposes only, report on any studies that
were initiated in the current fiscal year but will be finalized
next year, in addition to all other planned studies for
completion in the next two fiscal years, if information is
available.
When reporting on cost of studies completed, include the
following:
• Contract amounts associated with consultant-led
VE studies
• Approximate salary, travel and incidental in-house
costs associated with supporting consultant-led VE
studies
• Approximate salary, travel and incidental costs
associated with conducting in-house VE studies
• Approximate costs associated with documenting
in-house VE studies
Based the estimated costs of the projects at the time the VE
study was conducted. Project Costs include:
• Planning
• Environmental Compliance
• Preliminary Engineering
• Construction Estimate
• Construction Engineering Estimate
.
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11a Enter the total number of Enter the total number of recommendations proposed.
recommendations proposed

11b Enter the total number of Enter the total number of recommendations that were
recommendations approved approved.

12a Enter the value of Enter the total net value of the proposed recommendations.
recommendations proposed

12b Enter the value of Enter the total net value of the recommendations that were
recommendations approved approved.

13a Enter the total number of VECP Enter the total number of VECP that were submitted.
submitted

13b Enter the total number of VECP Enter the total number of VECP that were approved.
approved

14a Enter the total value of VECP Enter the total value of the proposed VECP.
submitted

14b Enter the total value of VECP Enter the total value of the approved VECP.
approved

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Part 3-Benefits of VE Studies and VE Change Proposals

Number Question Background and Instructions

15 Tabulate the approved VE Report each approved recommendation (from Question

recommendations according to 11b) in terms of the project feature or features that
functional benefit recommendation benefits. If a specific recommendation
can be shown to provide benefit to more than one feature
#safety described below, count the recommendation in each
category that is applicable:
#operations
• Safety: Recommendations that mitigate or reduce
#environment hazards on the facility
• Operations: Recommendations that improve real-
#construction time service and/or local, corridor, or regional
levels of service of the facility.
#other • Environment: Recommendations that
successfully avoid or mitigate impacts to natural
and or cultural resources.
• Construction: Recommendations that improve
work zone conditions, or expedite the project
delivery.
• Other: Recommendations not readily categorized
by the above performance indicators.
16 Tabulate the approved VECPs Report each approved change proposal (from Question 13b)
according to functional benefit in terms of the project feature or features that
recommendation benefits. If a specific recommendation
can be shown to provide benefit to more than one feature
described below, count the recommendation in each
# category that is applicable:

• Safety: Recommendations that mitigate or reduce

hazards on the facility
• Operations: Recommendations that improve real-
time service and/or local, corridor, or regional
levels of service of the facility.
• Environment: Recommendations that
successfully avoid or mitigate impacts to natural
and or cultural resources.
• Construction: Recommendations that improve
work zone conditions, or expedite the project
delivery.
• Other: Recommendations not readily categorized
by the above performance indicators.

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Part 4-FHWA Stewardship & Oversight of the VE Program

Number Question Background and Instructions

17 How is VE considered as part of Describe the level of consideration the VE program

your Division’s Risk Management typically receives in your Division’s annual Risk
process? Assessment process.

Brief Narrative

18a Did your Division Office conduct a

Process Review of the DOT’s VE
Program in FY 2008?

Yes/No

18b Does your Division Office plan to

conduct a Process Review of the
DOT’s VE Program in FY 2009?

Yes/No

19a Describe how the VE Program is
currently addressed in your
Division’s Stewardship and
Oversight Agreement with your
DOT.
Brief Narrative
For your Division’s Stewardship and Oversight Agreement,
summarize what is currently documented regarding the VE
Program’s:
• Description of general Roles and Responsibilities
• Procedures for the Division’s VE Coordinator
• Delegation of Authority for Projects

19b Describe your Division’s current Discuss the Division’s regular interaction with the State
level of involvement in the VE DOT VE Program staff in activities including the
Program following:

Brief Narrative • Participating in VE Studies

• Reviewing VE recommendations
• Monitoring progress of the VE Program delivery

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